Probabilistic Modeling of Catastrophic Weather Risks: Implications for Indemnification Plans for Animal Waste Spills

This paper presents probabilistic and economic models of two dimensions of catastrophic weather risks that are important factors underlying lagoon failures and waste spills in North Carolina-hurricane risks and the risks associated with significant cumulative rainfall. Hurricane strike and excessive cumulative rainfall probabilities are estimated for the entire state. Expected losses, which represent actuarially-fair insurance premium rates for a plan that would indemnify producers against damages from lagoon failures, are evaluated. Results imply annual premiums ranging from under $100 per year to over $2,062 per year. An interesting result is that those areas with the highest levels of expected loss are also those areas with the greatest concentration of waste lagoons.

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Replaced with revised version of paper 08/24/07.
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Selected Paper No. 174026

 Record created 2017-04-01, last modified 2020-10-28

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